Financial stocks get slammed as Canada, Mexico tariffs kick in (updated)
Updates with closing stock price movements.
Financial stocks led the broader stock averages down on Tuesday as Canada retaliated with 25% tariffs on imports from the U.S. to the Trump administration's 25% tariffs on imports from Mexico and Canada.
The S&P 500 Financials sector (NYSEARCA:XLF) slid 3.5% at the close, the worst performer of the S&P's 11 industry sectors, and steeper than the S&P 500's 1.2% decline. The tariffs aim to boost U.S. production by increasing the cost of imports. But in the near-term, that raises the price of many consumer products and risks constraining, if not reversing, economic growth.
Among the financial subsectors most affected are credit card issuers, auto lenders, fintechs, life insurers, banks, asset managers, and private equity companies.
Global X FinTech ETF (NASDAQ:FINX) dropped 2.4% in Tuesday trading. SoFi Technologies (SOFI) slid 3.5%, recovering some from its 9.9% plunge in the morning. Affirm Holdings (AFRM), which provides buy now, pay later financing, tanked 7.8%, and Block (XYZ) fell 5.4%.
Credit card companies stand to lose as consumers cut back or delay purchases. American Express (AXP) stock declined 4.1%, Capital One Financial (COF) sank 5.8%, and Synchrony Financial (SYF) dipped 3.3%.
Auto lenders Ally Financial (ALLY) fell 1.0% and Credit Acceptance (CACC) declined 2.5%, both off their session lows.
In the banking sector, the SPDR S&P Bank ETF (NYSEARCA:KBE) dropped 3.7% and SPDR S&P Regional Banking ETF (KRE) lost 3.5%. Bank of America (BAC) -6.3%, Morgan Stanley (MS) -5.7%, Comerica (CMA) -5.0%, PNC Financial Services (PNC) -4.8%, U.S. Bancorp (USB) -3.5%.
Online brokers also felt the pain, with Robinhood Markets (HOOD) slipping 1.4%, Interactive Brokers (IBKR) -2.7%, Charles Schwab (SCHW) -3.8%. HOOD recovered some from session lows after its CEO spoke at an industry conference.
Invesco Global Listed Private Equity ETF (PSP) dipped 2.3%, with Blackstone (BX) off 4.9%, Carlyle Group (CG) down 6.7%, and KKR (KKR) -9.2%.
Asset managers BlackRock (BLK) -1.5%, T. Rowe Price (TROW) -3.6%, Invesco (IVZ) -4.5%, Brookfield Asset Management (BAM) -5.3%.
Life insurers slid as well, with Brighthouse Financial (BHF) off 5.3%, MetLife (MET) -4.8%, Lincoln National (LNC) -5.4%, and Equitable Holdings (EQH) -5.4%.
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